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Equity99
Crest Ventures
CMP: ₹151.65
Target: ₹317
Crest Ventures is a diversified company having interest in real estate, financial services and investment and credit segment. It operates through its six subsidiaries, five associates companies and and joint venture company in above three segments. The company is involved in the development and management of various real estate properties, such as residential, commercial, and township properties.
It also provides financial services, including intermediation services in government securities, non-government securities, interest rate derivatives, rupee options, currency forwards and wealth management services.
Company’s EBITDA grew 64 per cent CAGR while PAT grew 43 per cent CAGR in the last three years. During FY18, its PAT zoomed 147 per cent to ₹94.01 crore against ₹38.08 crore on income of ₹94.46 crore fetching an EPS of ₹36.08. For Q1FY19, CREST posted income of ₹10.35 crore while its PAT stood to ₹9.36 crore fetching an EPS of ₹3.35.
The stock is available at a discount compared to NBFC industry PE of 41.05x and real estate industry PE of 27.48x. We are expecting revenue to increase by 10 per cent and 15 per cent in FY19E and FY20E respectively. PAT can rise ~20 per cent in FY19E and FY20E. We are initiating CREST with a ‘buy’ rating at ₹ 200 with target price of ₹317 (valuing at 8x its FY19E EPS).
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